NON-FUNJIBLE TOKEN (NFT): ER. AVINASH KULKARNI

Saturday Brain Storming Thought (218) 13/04/2024

NON-FUNJIBLE TOKEN (NFT)

Non-Funjible Tokens, often referred to as NFTs, are blockchain-based tokens that each represent a unique asset like a piece of art, digital content or media. An NFTs can be thought of as an irrevocable digital certificate of ownership and authenticity for a given asset, whether digital or physical

Key Takeaways of NFTs

1) NFTs are unique cryptographic tokens that exist on a blockchain and cannot be replicated

2) NFTs can represent digital or real-world items like artwork and real estate

3) “Tokenizing” these real-world tangible assets makes buying, selling, and trading them more efficient while reducing the probability of fraud

4) NFTs can represent individual identities, property rights and more

5) Collectors and investors initially sought NFTs after the public became, more aware of them, but their popularity has since waned

Benefits of NFTs

1) Direct monetization

2) Immutable ownership and authenticity

3) Royalties

4) Fractional ownership and accessible investing

5) Enhanced interactivity and utility

6) Easy entry and lesser restrictions

7) we can access global market easily

Disadvantages of NFTs

1) The market is high risk

2) Copies of Digital assets are possible

3) Costs to the environment

4) they are vulnerable to theft

5) NFTs are illiquid and volatile

6) NFTs do not generate income

7) NFTs can be used to perpetuate fraud

8) No permanent place to store

9) Capital Gainsctax explained

Uses and examples of NFTs

NFTs are being used to sell a range of virtual collectibles and assets

1) National Basketball Association virtual trading cards

2) Digital sneakers from Nike

3) Trading cards featuring personal memorabilia from actor William Shanter

4) A full studio album by rock band Kings of Leon

5) The original Nyan Cat meme

6) Collectible virtual characters called Crypto Punks

7) A variety of GIFs and images commissioned by Taco Bell, with proceeds going toward the restaurant chains charity organisation

8) Virtual real estate in Decentraland, a 3D virtual (VR) platform

9) Tokenized real-world assets, such as real estate

Steps of creating NFT

1) Choose the NFT format

a) PNG file format

b) Tagged Image file format

c) MP4 format

d) MP3 format

2) Figure out the content and availability of your NFT

3) Find a place where you can create NFTs

4) Open a crypto wallet and add crypto currency

5) Create your account and link your wallet

6) Follow the necessary instructions for producing the NFT

7) Publish the NFT and choose how to sell it

Can I create an NFT on my own

Anyone can create an NFT on their own

They just have to open a crypto wallet and create an account

Platforms like OpenSea, Coinbase and Rarible can facilitate this process

Cost for creation of NFT

The cost to create an NFT varies, depending on what platforms and technologies are involved

Users may pay as little as Rs 1 or Rs 1 lakhs to produce an NFT

NFT creating process

Creating an NFT is a straightforward process

NFT marketplaces often provide instructions for steps like how to open a crypto wallet and link it to an account, making it easy for anyone to begin creating and selling NFTs

History of NFTs

Kevin McCoy

Early projects, the first known NFT, quantum was created by Kevin McCoy and Anil Dash in May 2014

It consists of a video clip made by McCoy’s wife, Jenifer

First NFT trade

In 2014 – Quantam

In 2017, however the world became aware of Non-Funjible Tokens

During this time, numerous distinct NFT collections arose on the Ethereum blockchain

Most expensive NFT over sold

The Merge – $ 91 Million

The most expensive NFT sold is the Merge

The NFT collection created by digital artist PAK that was sold for
+$ 91, within just 48 hours following its release on 03/12/2021 on the NFT marketplace Nifty Gateway

Most expensive NFTs

1) The Merge – $ 91 Million

2) Everydays – The first 5000 days – $ 69 Million

3) Clock – $ 52 Million

4) Human One – $ 28 Million

5) CryptoPunk #5822 –
$ 23 Million

6) CryptoPunk #7523 –
$ 11 Million

7) TPunk # 3442 –
$ 10 Million

8) CryptoPunk # 4156 –
$ 10 Million

9) CryptoPunk # 5577 –
$ 7 Million

10) CryptoPunk # 3100 –
$’7 Million

Starting of NFT in India